http://www.cnbc.com/id/43798378
Operations normal at Iraq Trade Bank, new chief says
Published: Monday, 18 Jul 2011 | 2:43 PM ET
By Aseel Kami BAGHDAD, July 18 (Reuters) - Trade Bank of Iraq is operating normally and expansion plans are moving ahead, its new president said on Monday to allay fears of correspondent banks after its former chief fled amid allegations of financial irregularities. Hamdiya al-Jaf, who was recently appointed chairwoman and president of the state-run bank, said TBI is operating independently and without political interference. "At the beginning there was a fear among the correspondent international banks, or question marks for a short period, but ... we have proved to the world that the TBI has not changed concerning its work and its banking activities," Jaf told Reuters in an interview. Former TBI president Hussein al-Uzri fled Iraq in early June after Prime Minister Nuri al-Maliki ordered a judicial inquiry into the bank when a committee that including officials from the anti-corruption commission and audit authority reported financial violations. In a Reuters interview, Uzri said the allegations were fabricated and called himself a victim of a power grab by people close to Maliki. While the bank is overseen by Iraq's cabinet, by law, Jaf said, it operates independently and is monitored by the Central Bank of Iraq and the Bureau of Supreme Audit like any other Iraqi bank. "No political entity has any effect on the bank," Jaf said in her office in Baghdad's west-central Mansour district. She said the investigation of alleged financial violations had not been completed. Set up in 2003 after the U.S.-led invasion that toppled Saddam Hussein, TBI has developed into one of Iraq's largest and most profitable financial institutions, involved in financing purchases for the food ration programme and securing private sector financing for power and other reconstruction projects. Large U.S. financial institutions like JPMorgan Chase and Citibank are among its correspondent banks. TBI has 14 branches across Iraq and aims to add four more to cover all of Iraq's 18 provinces, as well as Islamic banking services in four provinces, Jaf said. It has received approval to open its first foreign branch in Beirut, she said, to be followed by a branch in Turkey. Net profit this year is expected to increase by more than 18 percent over last year, she said. In May, the bank reported an 18 percent increase in 2010 profits to $361 million. Jaf also expected the value of deposits to increase from $13 billion in 2010, but did not cite an exact figure. After years of war and economic sanctions, Iraq needs private investment to rebuild electricity, water and sewage systems and housing. Officials have said Iraq needs 2 million housing units in a five-year period. The government said last year it was looking for bidders to build 1 million housing units, valued at an average of $50,000 each, for a total value of $50 billion. TBI intends to help finance that project, Jaf said. "We will take part in the financing. It will bring benefits to Iraq in developing its construction infrastructure. In addition there will be financial revenues to the bank as a result," she said. (Reporting by Aseel Kami; Editing by Jim Loney and Jon Hemming)
Operations normal at Iraq Trade Bank, new chief says
Published: Monday, 18 Jul 2011 | 2:43 PM ET
By Aseel Kami BAGHDAD, July 18 (Reuters) - Trade Bank of Iraq is operating normally and expansion plans are moving ahead, its new president said on Monday to allay fears of correspondent banks after its former chief fled amid allegations of financial irregularities. Hamdiya al-Jaf, who was recently appointed chairwoman and president of the state-run bank, said TBI is operating independently and without political interference. "At the beginning there was a fear among the correspondent international banks, or question marks for a short period, but ... we have proved to the world that the TBI has not changed concerning its work and its banking activities," Jaf told Reuters in an interview. Former TBI president Hussein al-Uzri fled Iraq in early June after Prime Minister Nuri al-Maliki ordered a judicial inquiry into the bank when a committee that including officials from the anti-corruption commission and audit authority reported financial violations. In a Reuters interview, Uzri said the allegations were fabricated and called himself a victim of a power grab by people close to Maliki. While the bank is overseen by Iraq's cabinet, by law, Jaf said, it operates independently and is monitored by the Central Bank of Iraq and the Bureau of Supreme Audit like any other Iraqi bank. "No political entity has any effect on the bank," Jaf said in her office in Baghdad's west-central Mansour district. She said the investigation of alleged financial violations had not been completed. Set up in 2003 after the U.S.-led invasion that toppled Saddam Hussein, TBI has developed into one of Iraq's largest and most profitable financial institutions, involved in financing purchases for the food ration programme and securing private sector financing for power and other reconstruction projects. Large U.S. financial institutions like JPMorgan Chase and Citibank are among its correspondent banks. TBI has 14 branches across Iraq and aims to add four more to cover all of Iraq's 18 provinces, as well as Islamic banking services in four provinces, Jaf said. It has received approval to open its first foreign branch in Beirut, she said, to be followed by a branch in Turkey. Net profit this year is expected to increase by more than 18 percent over last year, she said. In May, the bank reported an 18 percent increase in 2010 profits to $361 million. Jaf also expected the value of deposits to increase from $13 billion in 2010, but did not cite an exact figure. After years of war and economic sanctions, Iraq needs private investment to rebuild electricity, water and sewage systems and housing. Officials have said Iraq needs 2 million housing units in a five-year period. The government said last year it was looking for bidders to build 1 million housing units, valued at an average of $50,000 each, for a total value of $50 billion. TBI intends to help finance that project, Jaf said. "We will take part in the financing. It will bring benefits to Iraq in developing its construction infrastructure. In addition there will be financial revenues to the bank as a result," she said. (Reporting by Aseel Kami; Editing by Jim Loney and Jon Hemming)